AEC biofuel teamwork urged

Thailand is being urged to step up joint development and know-how exchanges with Malaysia and Indonesia on ethanol and biodiesel to stave off reliance on oil imports, according to energy veterans.

"We should get more serious in joint development of biofuels, as in the future the oil price will definitely increase," said Khunying Thongtip Ratanarat, Thailand's energy guru and former executive director of the Petroleum Institute of Thailand.

Joint development "will help strengthen the Asean Economic Community in the future because we can grow, blend, sell and consume by ourselves."

The energy veteran also blasted the current palm oil price structure, saying Thailand's oil price is now distorted by political policy.

Praipol Koomsap, an economist from Thammasat University, said biofuel will not only enhance self-reliance in this region, but it will also reduce greenhouse gas emissions from fossil fuels.

He said the crude oil supply could be disrupted if there is conflict in the Middle East.

Thailand imports more than 50% of its crude oil from this region, so Asean should think more seriously about alternative fuels, he said.

Thailand is a net importer of oil, with imports worth 800 billion baht per year, while energy demand is rising by 5% per year.

The country's import dependence is expected to increase to 80% in 2030, up from the current 60%. Thailand spent 6.8% of its GDP on oil imports in 2008, projected to rise to 8.5% by 2030.

Independent economist Kriengsak Chareonwongsak suggested Thailand should set a long-term goal of alternative fuel in line with the Asean Economic Community and should have an action plan, not just tentative plan.

"A few decades ago Brazil announced it will become a global production hub for ethanol. Its state and private sectors have worked closely on joint development," said Dr Kriengsak.